Correlation Between Inventrust Properties and Kite Realty

Can any of the company-specific risk be diversified away by investing in both Inventrust Properties and Kite Realty at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Inventrust Properties and Kite Realty into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Inventrust Properties Corp and Kite Realty Group, you can compare the effects of market volatilities on Inventrust Properties and Kite Realty and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Inventrust Properties with a short position of Kite Realty. Check out your portfolio center. Please also check ongoing floating volatility patterns of Inventrust Properties and Kite Realty.

Diversification Opportunities for Inventrust Properties and Kite Realty

0.81

Correlation Coefficient

Inventrust Properties  Kite Realty

Very poor diversification

The 3 months correlation between Inventrust and Kite is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Inventrust Properties Corp and Kite Realty Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kite Realty Group and Inventrust Properties is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Inventrust Properties Corp are associated (or correlated) with Kite Realty. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kite Realty Group has no effect on the direction of Inventrust Properties i.e., Inventrust Properties and Kite Realty go up and down completely randomly.

Pair Corralation between Inventrust Properties and Kite Realty

Considering the 90-day investment horizon Inventrust Properties is expected to generate 1.42 times less return on investment than Kite Realty. But when comparing it to its historical volatility, Inventrust Properties Corp is 1.08 times less risky than Kite Realty. It trades about 0.27 of its potential returns per unit of risk. Kite Realty Group is currently generating about 0.35 of returns per unit of risk over similar time horizon. If you would invest  2,567  in Kite Realty Group on September 1, 2024 and sell it today you would earn a total of  190.00  from holding Kite Realty Group or generate 7.4% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	100.0%
Values	Daily Returns

Inventrust Properties Corp  vs.  Kite Realty Group

Inventrust Properties

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Inventrust Properties Corp are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Inventrust Properties may actually be approaching a critical reversion point that can send shares even higher in December 2024.

Kite Realty Group

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Kite Realty Group are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly unsteady basic indicators, Kite Realty may actually be approaching a critical reversion point that can send shares even higher in December 2024.

Pair Trading with Inventrust Properties and Kite Realty

The main advantage of trading using opposite Inventrust Properties and Kite Realty positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Inventrust Properties position performs unexpectedly, Kite Realty can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Kite Realty will offset losses from the drop in Kite Realty's long position.

The idea behind Inventrust Properties Corp and Kite Realty Group pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.